Hello, Need some of your experience please.Going to start my own company an to start its going to be just part time till I see how everything goes. But my question is what do I need to do as far as the business side of it. I know the question is broad but just don't know where to start. thanks in advance...
The first rule is: play by the rules. If you need a license and bond- get them. Make sure all the paperwork is in order. There are legions of sharks out there, looking for those they can exploit- and sometimes these sharks look very respectable, are pillars of the community, etc.
The second is to have a few good customers lined up. "Good customer" is defines as someone who can be counted upon for regular (repeat) business, and who pay their bills promptly. The "80/20 rule" applies here; 80% of your business will come from 20% of your customers.
Avoid the "big jobs" that will tie up large amounts of your time and money....you really don't want to be placing all your eggs in one basket. This is one fo the shark's favorite ploys...they know you've put yourself over a barrel, and will then expect you to accepts a reduced payment for the work you've already done!
Re: Starting up ?#157307 10/09/0509:38 PM10/09/0509:38 PM
One of the biggest tips I can give you is a lesson most of us learn the hard way:
Never give a low price based on a promise of future work. Usually these future jobs never materialize. An alarm goes off when a customer says something like "I've got a bigger/more project(s) I'll give if you give me a good deal on this one." These are leaches. They probably won't ever call you again or they always want a special low price for all their crappy little projects.
I also second doing everything above board. And don't undersell yourself, you'll just become known as the guy to go to for the cheap price. You have to make a profit. Profit is not your income, it is money above your pay that is to be used to help you grow and get through the rough spots. Speaking of money, you have to have some working capital unless you want to struggle for years just getting by.
If this is going to be more than just a hobby, I recommend reading a book called "The E Myth - Revisited".
Re: Starting up ?#157308 10/10/0508:03 AM10/10/0508:03 AM
Decide NOW where you want to be in 4-5 years and plan for the future. Figure out all of your costs and charge accordingly. You will find that doing things properly (to code, paying taxes and insurance, proper licensing, paying yourself and planning for your family's future) is very costly. Avoid the promises of future work mentioned above like the Black Death! Strive to let the customer know up front what the costs will be for you to do the work they want. If it is out of their budget, give them cheaper options. Use a payroll service even if it is just you working for now. They will file all the forms and pay all the taxes for you for a nominal fee (and keep you out of trouble with the government). Search the archives here for many great ideas and opinions on just about every business topic.
Power to the people
Re: Starting up ?#157310 10/10/0506:35 PM10/10/0506:35 PM
Hey thats some great advice you have given. Yes I have gotten my license an am in the process of checking on insurance an other stuff. Still don't know about doing the articles of incorporation or what else is required to start a business. I want to start out right if you know what I mean don't want any regrets later on . Any more help would be greatly appreciated all of you have already crossed this bridge an know the up ands downs.Thanks again.
Re: Starting up ?#157311 10/11/0505:16 AM10/11/0505:16 AM
I would encourage you to invest in an accountant and an attorney. They will be able to help guide you through the process of creating your new business. You can always read and study up on any business topic that arises, but it is a step in the right direction to surround yourself with qualified , professionals whom you can rely on. There are varying opinions here as to the need to incorporate. I wouldn't run one service call, or wire one new outlet without being incorporated. Seriously consider determining your own rates. Meaning, I can tell how many new contractors are entering our market because they all call asking the same questions. "How much do you charge to come out? How much do you charge an hour? How much do you charge per sq. foot or per drop?" Theres nothing wrong with researching the market. I just don't understand why it matters what everyone else charges. Its a dangerous game of who's leading who? I'm sure I'll take a lashing here for this statement, but it's true. It doesn't really matter what everyone else's rates are. If I priced our services based off of what the other 398 ECs in our area charged, I'd be out of business. I would strongly encourage you to set your rates off of your business, regardless of what everybody else charges.
Re: Starting up ?#157312 10/11/0505:33 AM10/11/0505:33 AM
I think in a way we are. At least that is the customers interpratation. Most believe all Ec are the same, they need something, we provide it.
That's where the DEFINE YOURSELF comes in.
What makes you different from the other guys.If it was just price, your doomed.
You have to provide a better service, better materials, better workmanship, ect. than the other guys.
Going back to the gas example, some people go into a full service bays, rather than the self service bays where gas is cheaper. Some people are paying 10-20% more for the same fuel. Why? They don't want to pump it themselves or They like the service, they like the greetings, they like their windows cleaned ect.